The Effect of Public Disclosures on Patent Filings

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In general, a patent application for an invention should be filed at the patent office before the invention is disclosed to the public.  Otherwise the public disclosure is considered “prior art” to the patent application and will be taken into account by the patent office examiner when considering whether the claimed invention meets the novelty and non-obviousness requirements of patentability.  In most countries, the patent office will refuse to grant the corresponding patent based on lack of novelty or obviousness if the claimed invention was disclosed to the public prior the filing date of the patent.

Some select countries operate “grace periods” that permit a patent applicant to file a patent application within a certain window of time after publicly disclosing their invention.  If the patent application is filed within the time window, the earlier disclosure is not considered prior art to the patent application.

Below is a non-exhaustive list of countries that permit a 12-month grace period, assuming the disclosure is made under the circumstances defined under each country’s specific patent laws:

  • Algeria
  • Argentina
  • Australia
  • Brazil
  • Canada
  • Chile
  • Colombia
  • Costa Rica
  • Japan*
  • Mexico
  • South Korea
  • Turkey
  • United States

* applies to disclosures made on or after December 9, 2017

Below is a non-exhaustive list of countries that permit a 6-month grace period, given the disclosure is made under certain circumstances:

  • Albania
  • Austria
  • Belgium
  • China
  • Germany
  • Russia

Because grace period provisions differ from country to country, a careful assessment of the details of the disclosure must be made in each case and after consulting with legal counsel to determine whether or not the grace period applies.  The United States and select other countries (including Canada) are unique in that their 12-month grace period broadly applies to any disclosures of the invention made by the inventor himself or any third party.   Most countries that offer grace periods define very specific circumstances in which the grace period is triggered.  In China and Germany, for example, the 6-month grace period applies in the specific circumstances where the public disclosure is a display of the invention at an officially recognized exhibition.

 

For more information regarding the countries that permit grace period filings and a summary of the circumstances under which the grace periods apply, please review the October 2019 WIPO report available here: 2019.10 WIPO Grace Period Summary

On-Sale Bar Applies to Secret Sales

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In Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc.,[1]the Supreme Court recently clarified that the on-sale bar to patentability under 35 U.S.C. §102 can apply to secret sales.  Under the Leahy–Smith America Invents Act (AIA), §102(a)(1) bars patentability if “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.”  Helsinn contended that the AIA changed the on-sale bar provision of §102 with the addition of the phrase “otherwise available to the public” thereby limiting the preceding terms, including the on-sale provision, to disclosures that make the claimed invention available to the public.[2]  Helsinn argued unsuccessfully that its AIA patent is not invalidated by a sale made more than one year before filing that included a confidentiality agreement regarding proprietary information.[3]

The Supreme Court held “that an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under §102(a).”[4]  In rejecting Helsinn’s arguments, the Supreme Court stated that their precedents suggest a sale or offer of sale does not require the invention to be publicly available to constitute a bar to patentability.[5]  Further, the Supreme Court stated, “[t]he Federal Circuit—which has ‘exclusive jurisdiction’ over patent appeals, 28 U. S. C. §1295(a)—has made explicit what was implicit in our precedents.  It has long held that ’secret sales’ can invalidate a patent.”[6]  Due to the settled pre-AIA precedent, there is a presumption that Congress adopted the earlier judicial construction of the phrase “on sale” by reenacting the same language in the AIA.[7]  The Supreme Court also stated that the “addition of ‘or otherwise available to the public’ is simply not enough of a change for us to conclude that Congress intended to alter the meaning of the reenacted term ‘on sale.’”[8]

[1]Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., et al., 586 U.S. ___ (2019) (slip op.), https://www.supremecourt.gov/opinions/18pdf/17-1229_2co3.pdf

[2]Id. at p. 8.

[3]Id. at p. 2.  See 35 U.S.C. §102(b)(1) (exceptions for certain disclosures made one year or less before the effective filing date).

[4]Id. at p. 9.

[5]Id. at p. 6.

[6]Id. at p. 7.

[7]Id.

[8]Id. at p. 8.

Sale of Manufacturing Services not a Bar to Patentability under 35 U.S.C. §102(b)

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The U.S. Court of Appeals for the Federal Circuit (CAFC) sitting en banc recently held that the sale of manufacturing services to an inventor more than one year before filing for a patent where neither title nor right to market the invention passes to the supplier does not create an on-sale bar to patentability under 35 U.S.C. §102(b).  The Medicines Company v. Hospira, Inc., No. 14-1469, slip op. at p. 33 (Fed. Cir. July 11, 2016) (en banc).  While the holding is limited to pre-AIA patents, some commentators have suggested the decision is also relevant to post-AIA patents.  §102(b) is applicable to pre-AIA patents and states that a person is not entitled to a patent if the invention was “on sale in this country, more than one year prior to the date of the application for patent in the United States.”  The U.S. Supreme Court clarified that the on-sale provision of §102(b) applies when “before the critical date, the claimed invention (1) was the subject of a commercial offer for sale; and (2) was ready for patenting.”  The Medicines Company, No. 14-1469, slip op. at p. 17 (citing Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 67-68 (1998)).  The CAFC interpreted the first part of the Pfaff two-step test stating:

We conclude that, to be “on sale” under § 102(b), a product must be the subject of a commercial sale or offer for sale, and that a commercial sale is one that bears the general hallmarks of a sale pursuant to Section 2-106 of the Uniform Commercial Code.

Id. at p. 3.

The Medicines Company (“MedCo”) is a pharmaceutical company that does not have in-house manufacturing capability, but instead contracts with Ben Venue Laboratories (“Ben Venue”) to manufacture drug products for Medco.  MedCo had developed a new compounding process to produce an improved bivalirudin drug product used as an anticoagulant and obtained patents having product and product by process claims directed to bivalirudin product having improved purity.  The patents had a filing date of July 27, 2008 and therefore had a critical date for purposes of the on-sale bar provision under §102(b) of July 27, 2007.  Medco had contracted with Ben Venue to manufacture commercial quantities of the improved bivalirudin drug product and paid Ben Venues for manufacturing the product in late 2006.  After the patents issued, Medco sued Hospira, Inc. (“Hospira”) for patent infringement and Hospira asserted in defense that the on-sale bar to patentability of §102(b) was triggered when Medco paid Ben Venue to manufacture the bivalirudin.

The CAFC stated that to meet the on-sale bar provision of §102(b) “the transaction must be one in which the product is ‘on sale’ in the sense that it is ‘commercially marketed,’” and that the sale of manufacturing services between Medco and Ben Venue was not a transaction where the product manufactured was commercially marketed.  Id. at p. 19.  The CAFC stated that Ben Venue acted instead as a pair of “laboratory hands” to manufacture the product that Medco could not product in-house.  Id. at p. 22.  According to the CAFC, there was no reason to treat Medco at a disadvantage to a company with in-house manufacturing capability.  Id. at p. 28.

In particular, invoices for the manufacturing services specifically indicated that charges were for manufacturing the bivalirudin, and Medco only paid Ben Venue 1% of the total market value for the drug.  Id. at p. 22.  In addition, control of the invention was maintained by the inventor since Medco retained title to the product and Ben Venue did not have the right to market the product it produced.  Id. at p. 19.  While Medco may have benefitted commercially by the ability to stock pile inventory, the CAFC noted that stock piling alone does not trigger the on-sale bar of §102(b).  Id.  Therefore, the CAFC determined that Ben Venue sold only manufacturing services to Medco, not the patented invention, and that the CAFC has “never espoused the notion that, where the patent is to a product, the performance of the unclaimed process of creating the product, without an accompanying ‘commercial sale’ of the product itself, triggers the on-sale bar.”  Id. at p. 20-22.

The CAFC cautioned that there still is no blanket “supplier exception” to the on-sale bar.  Id. at p. 31.  The fact that a transaction occurred between an inventor and supplier may be an indication that no commercial sale occurred, but that fact is not dispositive.  Id.  For instance, a commercial sale may be found if the supplier has title to the invention, authority to market the product or disclose the manufacturing process, or the sale is for full market value of the product.  Id.  According to the CAFC, for a commercial sale under §102(b) the “focus must be on the commercial character of the transaction, not solely on the identity of the participants.”  Id.

The impact of the decision for patent holders is to emphasize the importance of maintaining records clearly indicating only manufacturing services were purchased in any transaction that occurred prior to the critical date.  The decision clarifies that the on-sale bar to patentability under §102(b) applies only to a commercial sale or offer for sale of the invention more than one year prior to the application date.  If manufacturing services were the subject of a prior sale or offer for sale regarding the patented invention, maintain purchase orders and invoices that indicate charges were only for manufacturing services, that the amount billed reflects the costs to manufacture the patented product and not the full market value of the product itself, that title and control of the product was at all times maintained by the patent holder, and that the supplier did not have authority to market the product or disclose the manufacturing process.  These records will aid in proving the prior transaction was only for manufacturing services and not a commercial sale of the invention itself.

After Final Consideration Pilot 2.0 (AFCP 2.0)

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The After Final Consideration Pilot 2.0 (AFCP 2.0)[1] authorizes additional time for examiners at the U.S. Patent and Trademark Office (USPTO) to consider responses after final rejection.  The AFCP 2.0 also allows an applicant to amend at least one independent claim after final rejection that does not broaden the scope of the independent claim in any aspect.  The goal of the AFCP 2.0 is to reduce the pendency of applications by decreasing the number of Requests for Continued Examination (RCE) and by increasing collaboration between examiners and applicants to advance prosecution.  The After Final Consideration Pilot 2.0 requires no additional fee, and the USPTO has extended the AFCP 2.0 to run through September 30, 2016.

Under non-pilot practice, a response after final rejection may not have sufficient basis to be considered by the examiner, for instance responses that would require further search and/or consideration.[2]  However, the AFCP 2.0 allows applicants to file a request to have such a response considered without reopening prosecution.  The AFCP 2.0 authorizes a limited amount of time for examiners to consider a response after final rejection and to conduct further searching.  If the submission does not place the application in condition for allowance, examiners can also use the additional time to conduct an interview with the applicant to discuss the results of any further consideration and/or searching for the AFCP 2.0 submission.

Eligibility:

To be eligible for the AFCP 2.0 an application must have an outstanding final rejection and be either an original utility, plant, or design application filed under 35 U.S.C. 111(a), including continuation and divisional applications, or be an international application that has entered the national stage in accordance with 35 U.S.C. 371(c).  Reissue applications, reexamination proceedings, and provisional applications are not eligible for the AFCP 2.0 program.

The AFCP 2.0 is a modification of an earlier After Final Consideration Pilot (AFCP) program.  The AFCP 2.0 has three main differences over the AFCP: the applicant must request consideration under the AFCP 2.0, at least one independent claim must be amended in the response for the AFCP 2.0, and the examiner must request an interview with the applicant if the response does not result in a determination that all the claims are allowable.

A request for consideration of an amendment after final rejection under AFCP 2.0 must include:

(1)   Transmittal Form – A transmittal form identifying an AFCP 2.0 submission and requesting consideration under AFCP 2.0.  An applicant can use form PTO/SB/434 for the transmittal form.[3]

(2) Amendment – An after final response under 37 CFR 1.116 with an amendment to at least one independent claim that does not broaden the scope of the independent claim in any aspect.  To determine whether the claims have been broadened, the claims will be analyzed analogously to the guidance provided for reissue claims in MPEP 1412.03.

(3) Interview Statement – A statement indicating that the applicant will participate in any examiner initiated interview concerning the response.  Transmittal form PTO/SB/434 contains the required statement.

(4) Applicable Non-Pilot Fees – Any necessary fees consistent with current non-pilot practice regarding an after final response under 37 CFR 1.116, for instance fees for extension of time are still required.

All papers filed under the AFCP 2.0 must be filed electronically via the USPTO’s Electronic Filing System-Web (EFS-Web).  An incomplete submission will be processed consistent with current non-pilot practice for responses after final rejection under 37 CFR 1.116.

An applicant can only file one request for consideration under the AFCP 2.0 for an outstanding final rejection.  Additional requests will be treated under current non-pilot practice concerning responses after final rejection under 37 CFR 1.116.

Processing:

The examiner will verify that the submission complies with the requirements of the AFCP 2.0 program.  The examiner will perform an initial review of the amendment and determine whether additional search and/or consideration is necessary to determine if the amendment distinguishes over the prior art.  The AFCP 2.0 program gives examiners up to an extra 3 hours to review plant and utility applications, or 1 hour plus any time attributed to an interview for design applications, along with a 10 day adjustment to the docket management clock.[4]  If additional search and/or consideration is required but could not be conducted within the allotted time, the examiner will issue an advisory action and the submission will be possessed under current non-pilot practice for responses after final rejection under 37 CFR 1.116.

If additional search and/or consideration is not required, or could be completed in the allotted time, the examiner will perform any required search and/or consideration and determine whether the amendment places the application in condition for allowance.  If in condition for allowance, the examiner will enter the amendment and issue a notice of allowance.  If the response does not result in a determination that all of the claims are in condition for allowance, the examiner will request an interview with the applicant.  The examiner will follow the interview with an appropriate response in accordance with the current non-pilot practice to a submission after final rejection.  If the applicant is unable to schedule an interview within 10 calendar days from being contacted by the examiner, the examiner may proceed under current non-pilot practice.

After considering the AFCP 2.0 submission, the Examiner will issue an AFCP 2.0 Response Form (PTO-2323) indicating the disposition of the submission.[5]  The form is designed to improve communication with the applicant by clearly indicating how the examiner treated the AFCP 2.0 submission.  The form will provide the status of the submission and will accompany an interview summary, if applicable.  While the USPTO goal for examiners is to respond as soon as possible to after final amendments, applicants are advised to contact the examiner if they have not received a response within one month of filing the AFCP 2.0 request.

AFCP 2.0 and Additional After Final Filings:[6]

An AFCP 2.0 submission can be filed after a previously filed non-pilot after final amendment.  The previously filed amendment will be processed as usual, e.g. by mailing an advisory action.  However, an AFCP 2.0 request should not be filed to transform a previously filed non-pilot after final amendment into an AFCP 2.0 submission, even if a response to the previous amendment has not yet been received.  The AFCP 2.0 request form should be filed concurrently with a proposed amendment to ensure synchronization between USPTO databases.

If the applicant has already received an advisory action in response to a non-pilot after final amendment, the applicant can still file an AFCP 2.0 request.  If the applicant has already filed a notice of appeal, the applicant can still file an AFCP 2.0 request provided the applicant has not filed an appeal brief or a Pre-Appeal Brief Conference Request.  The applicant can also file a notice of appeal concurrently with the AFCP 2.0 request.

Conclusion:

After a final rejection, an applicant does not have a right to further unrestricted prosecution and only in limited situations are further amendments or arguments considered.  Therefore, consider filing a response to a final rejection with a non-broadening amendment to an independent claim under the AFCP 2.0 pilot program if you believe that the response will place the application in condition for allowance with only minimal further consideration and/or searching by the examiner.  Even if the application is not allowed, an applicant can benefit from additional consideration, search, and an interview with the examiner under the AFCP 2.0 program.

[1] After Final Consideration Pilot Program 2.0, 78 Fed. Reg. 29117 (May 17, 2013).

[2] See MPEP 714.12-714.13.

[3] CERTIFICATION AND REQUEST FOR CONSIDERATION UNDER THE AFTER FINAL CONSIDERATION PILOT PROGRAM 2.0, http://www.uspto.gov/sites/default/files/forms/sb0434.pdf (last visited Jan. 11, 2016).

[4] Guidelines for Consideration of Responses After Final Rejection under 37 CFR 1.116(b) under the After Final Consideration Pilot 2.0 (AFCP 2.0), http://www.uspto.gov/sites/default/files/patents/init_events/afcp_guidelines.pdf (last visited Jan. 11, 2016).

[5] After Final Consideration Pilot 2.0, http://www.uspto.gov/patent/initiatives/after-final-consideration-pilot-20 (last visited Jan. 11, 2016).

[6] FREQUENTLY ASKED QUESTIONS – AFCP 2.0 PILOT PROGRAM, http://www.uspto.gov/sites/default/files/afcp%202-0%20faq.pdf (last visited Jan. 11, 2016).